|Today the USDA announced that they have extended the deadline to enroll in Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) for program year 2022. The deadline to apply for 2022 coverage is now March 25, 2022. DMC and SDMC signups opened in December 2021 to help dairy producers manage economic risk brought on by milk price and feed cost disparities. FSA has also updated how feed costs are calculated, which will make the program more reflective of dairy producers’ actual expenses.
How to Sign Up: You must work with your local Farm Service Agency (FSA) service center to sign up for the DMC program by March 25. Click here to find a service center near you.
Background on the DMC Program: DMC offers reasonably priced protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production.
A Recap of 2021 Payments: Producers who enrolled in DMC for 2021 received margin payments each month, January through November, for a total of $1.2 billion, with an average payment of $60,275 per operation.
Feed Cost Updates: USDA has recently changed the DMC feed cost formula via final rule published on December 13, 2021, to better reflect the actual cost dairy farmers pay for high-quality alfalfa hay. FSA now calculates payments using 100% premium alfalfa hay rather than 50%. In December 2021, following publication of the new feed cost policy, $102 million was paid to producers as a result of the revised high quality alfalfa feed cost formula. The amended feed cost formula will make DMC payments more reflective of actual dairy producer expenses.